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NEW YORK (
TheStreet) -- Stock futures were rising Wednesday as
Federal Reserve Chairman Ben Bernanke took an accommodative tone on monetary policy in a pre-released comment that he is scheduled to deliver to a Congressional committee later this morning.
Investor sentiment was additionally bolstered after
Bank of America(BAC - Get Report) reported a surge in second-quarter net profit.
Bernanke, in prepared remarks, emphasized that while the Fed is poised to continue to help stimulate the U.S. economy, the central bank may change tactics if the recovery's pace quickens.
"Because our asset purchases depend on economic and financial developments, they are by no means on a preset course," Bernanke said in a speech sent to news reporters.
The Fed chairman explained that if economic conditions improve faster than expected and inflation appears to be rising decisively upward, the pace of asset purchases could be reduced more quickly and tapering could begin later this year. However, if the outlook for employment were to become relatively less favorable and inflation didn't appear to be moving back towards 2%, the current pace of purchases could be maintained for longer.
"If needed, the Committee would be prepared to employ all of its tools, including an increase in the pace of purchases for a time, to promote a return to maximum employment in a context of price stability."
Bernanke said that in addition, even after purchases end, the Federal Reserve will be holding its stock of Treasury and mortgage-backed securities off the market and reinvesting the proceeds from maturing securities, which will continue to put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
Futures for the
S&P 500 were rising 6.5 points, or 7.09 points above fair value, to 1,677.75. Futures for the
Dow Jones Industrial Average were up 32 points, or 42.15 points above fair value, to 15,423. Futures for the
Nasdaq were up 9.5 points, or 9.48 points above fair value, to 3,080.25.
The benchmark 10-year Treasury was rising 14/32, diluting the yield to 2.485%.The dollar was rising 0.16% to $82.63 according to the
U.S. dollar index.
Fed Chairman Ben Bernanke begins his two-day semi-annual monetary policy and economic report before Congress on Wednesday at 10 a.m. EDT, starting with testimony before the House Financial Services Committee in Washington and followed by his speech before the Senate Banking Committee on Thursday.
His appearance will be followed at 2 p.m. by the release of the Fed's July Beige Book report detailing anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts.
Bank of America(BAC - Get Report) was rising 1.08% to $14.07 in premarket trading. The firm on Wednesday said net profit for the second quarter
rose 63% to $4 billion from $2.5 billion a year ago as it slashed $1 billion in expenses. Profit in the bank's global markets segment jumped 93% to $959 million from $497 million. Equities revenue in that segment rose 53% from the second quarter of 2012, and was the highest since the first quarter of 2011.
Intel(INTC - Get Report), the world's largest chipmaker, is expected to post second-quarter earnings after the closing bell Wednesday of 39 cents a share on revenue of $12.9 billion. Shares were ticking down 0.45% to $24.14.
American Express(AXP - Get Report), one of the world's largest credit card companies, is forecast to post quarterly earnings Wednesday after the close of $1.22 a share on revenue of $8.28 billion. Last year, American Express earned $1.34 billion, or $1.15 a share, on revenue of $8 billion. Shares were slumping more than 4% to $74.90.
eBay's(EBAY) earnings are also expected after the closing bell.
Headline housing numbers took on a downbeat tone Wednesday. Housing starts declined to a less than expected seasonally adjusted annual rate of 836,000 in June from an upwardly-revised 928,000 in May, according to the Census Bureau. Economists, on average, were expecting a print of 959,000, according to a
Thomson Reuters poll. Building permits fell to a less than expected annual pace of 911,000 from an upwardly-revised 985,000. Economists were expecting an annual pace of 1 million.
The Mortgage Bankers' Association reported before the market open that its seasonally adjusted index of mortgage application activity declined 2.6% in the week ended July 13 as appetite for refinancing loans soured as mortgage interest rates stayed at two-year highs.
Yahoo!(YHOO) was off 0.52% to $26.74 after the Internet company reported top-line numbers for the second quarter that fell short of Wall Street estimates and the issued soft third-quarter guidance.
Yahoo! reported earnings of 35 cents a share on revenue of $1.07 billion, excluding traffic acquisition costs; revenue fell 1% from last year.
The FTSE 100 in London was rising 0.03%, while the DAX in Germany was gaining 0.28%, recovering losses that took place following the decision by Mark Carney, the new governor of the Bank of England, to vote against more quantitative easing in a meeting that saw an overall unanimous 9-0 vote by policymakers against more QE. This was the first of such occurrences since October 2012. However, the Bank of England noted that most of members think "the onus on policy at this juncture was to reinforce the recovery by ensuring stimulus was not withdrawn prematurely."
The Nikkei 225 in Japan closed up 0.11% and the Hong Kong Hang Seng finished higher by 0.28%.
August oil futures were falling 54 cents to $105.46 a barrel, while August gold futures were slipping $5.70 to $1,284.70 an ounce.
Major U.S. stock averages dropped Tuesday as
Coca-Cola(KO) reported sales that missed analysts' forecasts, leaving traders uncertain about the trajectory for consumer spending.
Follow @atwtseWritten by Andrea Tse in New York
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